Simple Interest
Math MCQs

Question :    What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 5% simple interest?

Correct Answer  $4400

Solution & Explanation

Solution

Given,

Principal (P) = $4000

Rate of Simple Interest (SI) = 5%

Time (t) = 2 years

Thus, Amount (A) = ?

The Rate of Interest is always calculated per annum, i.e. per year.

Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% per annum.

Method (1) Using Formula

Calculation of Simple Interest

Formula to Calculate Simple Interest

Simple Interest (SI) = Principal × Rate × Time

Thus, Simple Interest (SI) = $4000 × 5% × 2

= $4000 ×⁵/₁₀₀ × 2

= ^{4000 × 5 × 2}/₁₀₀

= ^{20000 × 2}/₁₀₀

= ⁴⁰⁰⁰⁰/₁₀₀

= $400

Thus, Simple Interest = $400

Calculation of Amount

The total money paid to the lender by a borrower is called the Amount.

In other words, sum of priciple and interest is called the Amount.

Formula to Calculate the Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $400

= $4400

Thus, Amount to be paid = $4400 Answer

Method (2)

Calculation of Amount when Principal, Rate of Simple Interest and Time are given

Calculation of Amount directly using Principal, SI, and Time

Formula to calculate the Amount

Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)

⇒ A = P + PRT

Here in the question, P = $4000

Rate of Simple Interest (SI) or (R) = 5%

And, Time (t) = 2 years

Thus, Amount (A)

= $4000 + ($4000 × 5% × 2)

= $4000 + ($4000 ×⁵/₁₀₀ × 2)

= $4000 + (^{4000 × 5 × 2}/₁₀₀)

= $4000 + (^{20000 × 2}/₁₀₀)

= $4000 + (⁴⁰⁰⁰⁰/₁₀₀)

= $4000 + $400 = $4400

Thus, Amount (A) to be paid = $4400 Answer

Method (3) Unitary Method

Calculation of Amount using Unitary Method

Calculation of Interest using Unitary Method

Here, given Rate of Simple Interest = 5%

This, means, $5 per $100 per year

∵ For $100, the simple interest for 1 year = $5

∴ For $1, the simple interest for 1 year = ⁵/₁₀₀

∴ For $4000, the simple interest in 1 year

= ⁵/₁₀₀ × 4000

= ^{5 × 4000}/₁₀₀

= ²⁰⁰⁰⁰/₁₀₀ = $200

Thus, simple interest for 1 year = $200

Therefore, simple interest for 2 years

= Simple interest for 1 year × 2

= $200 × 2 = $400

Thus, Simple Interest (SI) = $400

Calculation of Amount

Amount = Principal + Interest

Thus, Amount = $4000 + $400

= $4400

Thus, Amount to be paid = $4400 Answer

Similar Questions

(1) If Linda paid $4020 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

(2) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 8% simple interest.

(3) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $9000 to clear the loan, then find the time period of the loan.

(4) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 3% simple interest?

(5) How much loan did Lisa borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6655 to clear it?

(6) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $10800 to clear the loan, then find the time period of the loan.

(7) How much loan did Emily borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7762.5 to clear it?

(8) Patricia had to pay $3339 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(9) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 8 years.

(10) If Donna paid $5820 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.